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12:09
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Originally posted by Sammyt15
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Not necessary true. Generally when studying economics if the value of the currency is dropping domestically then foreign investors and companies will sell their assets in that country due to their assets devaluing and wanting to protect their capital. For example there's been plenty of foreign buyers in the Australian housing market the last few years. Let's say from a American investors perspective you bought a house in 2013 when the exchange rates were at parity and now the AUD has devalued to 75cents, therefore, your asset is worth less than when you bought it.
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Some simple calculations to go with this. American investor pays $1,000,000 for a house in Australia in 2013 at parity exchange rate. The house increases in value to $1,200,000 and the exchange value goes to 0.75USD/AUD. Investor sells the house for $1,200,000 and has to change the money back to USD at the exchange rate of 0.75.
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